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May 10, 1869 at Promontory, Utah The Wedding of the Rails Central Pacific and Union Pacific May 10, 1869 at Promontory, Utah The Wedding of the Rails Central Pacific and Union Pacific

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In 1856 Henry Bessemer devised a way of converting iron into steel on a large scale. His invention involved blowing air through molten iron in a converter, or furnace, in order to burn off the excess carbon. His invention revolutionized the Industrial Age. New Uses for Steel Steel used in railroads, barbed wire, farm machines Changes construction: Brooklyn Bridge; steel-framed skyscrapers In 1856 Henry Bessemer devised a way of converting iron into steel on a large scale. His invention involved blowing air through molten iron in a converter, or furnace, in order to burn off the excess carbon. His invention revolutionized the Industrial Age. New Uses for Steel Steel used in railroads, barbed wire, farm machines Changes construction: Brooklyn Bridge; steel-framed skyscrapers

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Expansion of Railroads 1869, 30,000 miles of track 1900, 200,000 miles of track Distribution System to the marketplace Symbol of growth

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With the Bessemer Process and Carnegie steel, Skyscrapers revolutionized the building industry….. Major city skylines would be dotted with this new type of building as the 1900s begin.

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Edison Inventions helped to shape modern society More than 1,000 inventions patented Light bulb Phonograph Incandescent electric lamp Starter for automobiles that eliminated hand crank Batteries Perfected stock ticker New York City first city to powered by electricity The motion picture camera and projector First used hello as phone greeting Helped Alexander G. Bell with the telephone Edison Inventions helped to shape modern society More than 1,000 inventions patented Light bulb Phonograph Incandescent electric lamp Starter for automobiles that eliminated hand crank Batteries Perfected stock ticker New York City first city to powered by electricity The motion picture camera and projector First used hello as phone greeting Helped Alexander G. Bell with the telephone Wizard of Menlo Park

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An economic belief supported by the U.S. that opposes the government regulating business. laissez-faire In the late 1800s businesses operated without much government regulation. This is known as laissez-faire economics. allow to be government stays out of a persons business Laissez-faire means allow to be or the government stays out of a persons business in French. capitalism Laissez faire supports our economic system of capitalism

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New Business Culture 1.Laissez Faire --> the ideology of the Industrial Age. Individuals should compete freely in the marketplace. Own their own business and use their skills to better our culture and make profit for themselves. The market was not man-made or invented and no room for government in the market. Government should allow for natural competition for the betterment of our society. Individuals should compete freely in the marketplace. Own their own business and use their skills to better our culture and make profit for themselves. The market was not man-made or invented and no room for government in the market. Government should allow for natural competition for the betterment of our society.

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Economic system based on cooperation not competition government ownership Belief in government ownership of business and capital (money, natural resources) Government controls production, sets wages, prices and distributes the goods. No profit or competition. laissez fairecapitalism Opposite of laissez faire and capitalism Capitalism is too Corrupt! Capitalism is too Corrupt!

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A business consisting authorized by law to act as a single person and with the ability to sell shares of stock to raise capital 9. Corporation:

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Investors who invest their money into a corporation who each receive a share of ownership in proportion to the amount they invested dividendif the corporation makes a profit---than investor gets a dividend or a share of the profit. 10. Shareholders or stockholders:

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Shareholders have the right to profits, through dividends but are not held liable for the company's debts. Risk is spread over the shareholders so if the company goes bankrupt, the lose is not so devastatingRisk is spread over the shareholders so if the company goes bankrupt, the lose is not so devastating 13. Limited liability:

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Companies in related fields combine under the direction of a single board of trustees. Shareholders had no say. Outlawed today. Monopoly 14. Trusts or Monopoly

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BIGGER IS BETTER trust or monopoly A trust or monopoly controls an entire industry make product cheaper lower prices to customer

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Modern Day Example of Vertical Integration Ford Motor company –What goes in an automobile? –Why is it an advantage for a company to own/control all production? Ford Motor company –What goes in an automobile? –Why is it an advantage for a company to own/control all production? Vertical Integration You control all phases of production from the raw material to the finished product

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Advantages Vertical Integration You are always in control of supply of the products you need You are always in control of supply of the products you need In control of labor cost, land/resources In control of labor cost, land/resources Always in control of the cost Always in control of the cost Schedule your production of autos because you are in control of all factors Schedule your production of autos because you are in control of all factors Can you give another example of this? Can you give another example of this? You are always in control of supply of the products you need You are always in control of supply of the products you need In control of labor cost, land/resources In control of labor cost, land/resources Always in control of the cost Always in control of the cost Schedule your production of autos because you are in control of all factors Schedule your production of autos because you are in control of all factors Can you give another example of this? Can you give another example of this?

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Other Vertical Integrations Boeing Boeing Anheiser-Busch: all grown by own producers Anheiser-Busch: all grown by own producers McDonalds: own cattle ranches McDonalds: own cattle ranches Oil companies Oil companies AOL Time Warner AOL Time Warner Boeing Boeing Anheiser-Busch: all grown by own producers Anheiser-Busch: all grown by own producers McDonalds: own cattle ranches McDonalds: own cattle ranches Oil companies Oil companies AOL Time Warner AOL Time Warner

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Modern Day Examples of Horizontal Integration Microsoft Microsoft Starbucks Starbucks De Beers De Beers Microsoft Microsoft Starbucks Starbucks De Beers De Beers

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A person who organizes, operates, and assumes the risk for a business venture

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Robber Barons Business leaders built their fortunes by stealing from the public. They drained the country of its natural resources. They persuaded public officials to interpret laws in their favor. They ruthlessly drove their competitors to ruin. They paid their workers meager wages and forced them to toil under dangerous and unhealthful conditions.

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Captains of Industry Served their nation in a positive way. Increased the supply of goods by building factories. Raised productivity and expanded markets. Created jobs! Charity! Created museums, libraries, and universities, many of which still serve the public today.

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Extortion: Extortion: Forced against your will RebatesRebates : discount or refund on freight charges Drawbacks / Kickbacks:Drawbacks / Kickbacks: Standard Oil gave certain railroads all its shipping business if it agreed to charge Standard Oil 25% to 50% less than its competitors robber Small businesses Small businesses complained monopolies eliminated fair competition

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Captain of Industry Monopolized the steel industry Rags to riches story---came from Scotland very poor. Bessemer ProcessUsed scientific ideas (Bessemer Process) to develop a better way to produce steel and sell a quality a product for an inexpensive price. Used Horizontal integration. Carneige Picture

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Captain of Industry Came from a wealthy family Came from a wealthy family Bought a substitute during the Civil War. Bought a substitute during the Civil War. Standard Oil Formed the first modern corporations in the oil industry Standard Oil first billionaire Was the first billionaire in the U.S. by 1900. Vertical Integration and Horizontal Integration Used Vertical Integration and Horizontal Integration to gain a monopoly in the oil business. Cartoon Rockefeller

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Formed a steamship company in 1829 Dominated shipping along the Atlantic 1849 established steamship that carried people from New York to San Francisco in Gold Rush days Leading U.S. steamship owner, nicknamed The Commodore Gained control of the Hudson River Railroad

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After Civil War Vanderbilt bought most railroad lines from New York to Chicago 1877, controlled 4,500 miles of railroads Worth over $100 million Philanthropist--donated $1 million to Vanderbilt University After Civil War Vanderbilt bought most railroad lines from New York to Chicago 1877, controlled 4,500 miles of railroads Worth over $100 million Philanthropist--donated $1 million to Vanderbilt University

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The effort of an individual or organization to increase the well- being of humankind, as by charitable aid or donations.

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Philanthropist Gave millions to colleges and libraries.Gave millions to colleges and libraries. It was the sacred duty of the wealthy to give back to society who has given to him. Stressed education as a means to better ones self. Carnegie Hall Cartoon Carnegie

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On Wealth Andrew Carnegie The Anglo-Saxon race is superior. Gospel of Wealth (1889). Inequality is inevitable and good. Wealthy should act as trustees for their poorer brethren. The Anglo-Saxon race is superior. Gospel of Wealth (1889). Inequality is inevitable and good. Wealthy should act as trustees for their poorer brethren.

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Philanthropist Gave millions of his money to hospitals and colleges.Gave millions of his money to hospitals and colleges. University of ChicagoUniversity of Chicago Spellman CollegeSpellman College National ParksNational Parks United NationsUnited Nations WilliamsburgWilliamsburg Cancer ResearchCancer Research Rockefeller

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Worth over $100 million Philanthropist donated $1 million to Vanderbilt University Worth over $100 million Philanthropist donated $1 million to Vanderbilt University

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rebatesControlled the railroad by forcing them to pay him rebates because of the volume of business he gave them. Rock a FellowWas called Rock a Fellow by many Pay no man a profitRuthless business man: Pay no man a profit Cartoon Rockefeller

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Rockefeller/Control Govt laissez faire Rockefeller was so wealthy, he dictated to the U.S. Government to protect big business---- laissez faire

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free enterprise Rockefeller would be hated by many because he had too much control over the oil industry and the government as viewed by the common man---- -Some believed he was corrupt because he took away the right to compete- -- free enterprise

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History repeats itself-----The Robber Barons of the Middle Ages and the Robber Barons of Today…..

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1. Granger State Laws State laws regulating railroad prices in 18 states to help farmers.

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2. Munn v. Illinois (1876) Supreme Court decision stating that states had the ability to regulate private property if it affected public interest. 3. Wabash Case (1886) States could regulate commerce within their states, still unconstitutional for states to regulate interstate commerce. Showed need for Federal regulation of interstate commerce.

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Congress passed Interstate Commerce Commission (ICC). U.S. government regulated interstate trade within the country. End railroad corruption of charging high prices to ship goods and Rockefellers illegal deals. Rebates/kickbacks/drawbacks were illegal. trusts/monopolies In 1890, Congress passed a law which made trusts/monopolies illegal or any business that prevented fair competition. 4. Interstate Commerce Act (1887)

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trusts/monopolies In 1890, Congress passed a law which made trusts/monopolies illegal or any business that prevented fair competition. 5. Sherman Antitrust Act (1890) Protect the consumers!

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MORRILL TARIFF ACT, 1862 MORRILL TARIFF ACT, 1862 To protect and encourage American industry, Congress passed this tariff after the South seceded from the Union. NATIONAL BANKING SYSTEM, 1863 NATIONAL BANKING SYSTEM, 1863 To stimulate the economy and set up a banking system, Congress passed this act which was a significant step towards a unified, national banking system until replaced by the Federal Reserve in 1913. MORRILL ACT, 1862 MORRILL ACT, 1862 To promote education, Congress provided grants of public lands to the states for support of education. Land-grant colleges LAND GRANTS TO RAILROADS LAND GRANTS TO RAILROADS US Govt. donated land to railroad companies to encourage growth of this mode of transportation. US Govt. donated approx. 170 million acres of land……. Govt. assists

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6. Social Darwinism British economist, Herbert Spencer. Advocate of laissez- faire. Adapted Darwins ideas from the Origin of Species to humans. Belief that there was a natural upper class and lower class. Survival of the fittest British economist, Herbert Spencer. Advocate of laissez- faire. Adapted Darwins ideas from the Origin of Species to humans. Belief that there was a natural upper class and lower class. Survival of the fittest

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Social Darwinism Belief that in the economic world the strongest companies will survive The growth of a large business is merely a survival of the fittest. J. Rockefeller Belief that in the economic world the strongest companies will survive The growth of a large business is merely a survival of the fittest. J. Rockefeller

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Social Darwinism Social Darwinists believed that companies struggled for survival in the economic world and the government should not tamper with this natural process. The fittest business leaders would survive and would improve society. Belief that hard work and wealth showed Gods approval and those that were poor were lazy and naturally a lower class. Social Darwinists believed that companies struggled for survival in the economic world and the government should not tamper with this natural process. The fittest business leaders would survive and would improve society. Belief that hard work and wealth showed Gods approval and those that were poor were lazy and naturally a lower class.

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Survival of the fittest. 1. All living things have always competed for survival. Survival of the fittest. 2. All living things have evolved over millions of years as a result of genetic changes. 3. Some plants and animals developed traits that helped them survive. Survival of the fittest. 1. All living things have always competed for survival. Survival of the fittest. 2. All living things have evolved over millions of years as a result of genetic changes. 3. Some plants and animals developed traits that helped them survive. individuals compete 1. Every human activity individuals compete for success. 2. The unfit or incompetent lose and the strong or competent win. natural upper class 3. These winners make up a natural upper class. 4. Hard worked paid off, and lazy were inferior. individuals compete 1. Every human activity individuals compete for success. 2. The unfit or incompetent lose and the strong or competent win. natural upper class 3. These winners make up a natural upper class. 4. Hard worked paid off, and lazy were inferior. Social Darwinism 2

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No state shall make or enforce any law which deprives any person of life, liberty, or property, without due process of law,All persons born in the U.S. are citizens of this country and the state they reside in. No state shall make or enforce any law which deprives any person of life, liberty, or property, without due process of law, nor deny to any person with its jurisdiction to the equal protection of the laws. Industrialists would use the 14th Amendment as a way to defend a corporation from the Sherman Anti-Trust Act. 14 th amend

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The old familiar relations between employer and employee were passing. A few generations before, the boss had known every man in his shop. He called his men by their first names, asked about the family and swapped jokes and stories with them. Today, you have large factories, the personal touch is gone! Theodore RooseveltIMPERSONALIZATION

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In the 1880s, children made up more than 5 percent of the industrial labor force. Children often left school at the age of 12 or 13 to work. Girls sometimes took factory jobs so that their brothers could stay in school. If an adult became too ill to work, children as young as 6 or 7 had to work. Rarely did the government provide public assistance, and unemployment insurance didnt exist. The theory of Social Darwinism held that poverty resulted from personal weakness. Many thought that offering relief to the unemployed would encourage idleness.

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Division of Labor Some owners viewed workers as parts of the machinery. Unlike smaller and older businesses, most owners never interacted with workers. impersonalization Work Environment Factory workers worked by the clock. Workers could be fired for being late, talking, or refusing to do a task. Workplaces were not safe. Children performed unsafe work and worked in dangerously unhealthy conditions. In the 1890s and early 1900s states began legislating child labor.

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Picture: Workers vs Owner Industrial millionaires were condemned in the Populist platform of 1892 The fruits of the toil of millions are boldly stolen to build up colossal fortunes for a few…and the possessors of these, in turn despise the Republic and endanger liberty. From the same prolific womb of government injustice we breed the two great classes---tramps and millionaires.

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extravagant lifestyles caste system The wealthy would manifest itself in an elite class of Americans who lived extravagant lifestyles. Many common people resented their snobbish attitudes and wealth. In some respects, there was a caste system in the U.S. 1861---------3 millionaires----------1900--------3,800 By 1900, 90% of the wealth in the U.S. was controlled by 10% of population.

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People refuse to buy a company's product until the company meets demands. 10. Boycott 9. Labor Strike The unions' method for having their demands met. Workers stop working until the conditions are met. It is a very effective form of attack. 8. Labor Union Workers who organize against their employers to seek better wages and working conditions for wage earners. New immigrants who would replace strikers and work for less pay. Often violence would erupt between strikers and scabs who were trying to cross picket lines to work. 11. Scab Worker

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A working establishment where only people belonging to the union are hired. It was done by the unions to protect their workers from cheap labor. 13. Black List or Black Balled List of people disliked by business owners because they were leaders in the Union. Often would loose their jobs, beaten up or even killed. Type of negotiation between an employer and labor union where they sit down face to face and discuss better wages, etc. 14. Collective Bargaining 12. Closed Shop 15. Yellow Dog Contracts A written contract between employers and employees in which the employees sign an agreement that they will not join a union while working for the company

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16. Lock Out Owner of industry would lock out workers who were trying to form a union and replace them with scabs. Cooperatives Industry or business organization owned by and operated for the benefit of those using its servicesnon-profit

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National Labor Union William Sylvis, 1866 Skilled, unskilled, farmers but excluded Chinese… CooperativesCooperatives, 8 hr. work day, against labor strikes Founded a political party in 1872 Chinese Exclusion ActInvolved in the Chinese Exclusion Act. Lost election, faded away Replaced by Knights of Labor.

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American Federation of Labor or AFL Samuel Gompers, 1881 Skilled workers in separate unions. Work within political system for change. Closed shopcollective bargainingClosed shop and collective bargaining Over 1 million workers joined and won several strikes Small part of work force eligible to join.

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18. Reaction of Employers Some took steps to stop unions, such as: forbidding union meetings firing union organizers lock out Owner of industry would lock out workers who were trying to form a union and replace them with scabs. Scab workers Scab workers: Employers would hire immigrants to replace strikers and work for less pay. Often violence would erupt between strikers and scabs who were trying to cross picket lines to work. refusing to recognize unions as their workers legitimate representatives

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Founder of the Socialist Party in the U.S. Overthrow the existing laissez faire and capitalistic government ownership Believes in government ownership of business and capital (money, natural resources) Government controls production, sets wages, prices and distributes the goods. No profit or competition. Runs for the presidency several times.

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20. Railroad Workers Organize The Great Railroad Strike of 1877 –Railway workers protested unfair wage cuts and unsafe working conditions. –The strike was violent and unorganized. –President Hayes sent federal troops to put down the strikes. From then on, employers relied on federal and state troops to repress labor unrest.

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Debs and the American Railway Union –At the time of the 1877 strike, railroad workers mainly organized into various brotherhoods, which were basically craft unions. –Eugene V. Debs proposed a new industrial union for all railway workers called the American Railway Union (A.R.U.). –The A.R.U. would replace all of the brotherhoods and unite all railroad workers, skilled and unskilled. Railroad Workers Organize

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May 3, 1886, joining a nation wide strike for an 8 work day Chicago workers protested against the McCormick Reaper plant. May 3, 1886, joining a nation wide strike for an 8 work day Chicago workers protested against the McCormick Reaper plant. A riot broke out and Chicago police officers killed several protesters A riot broke out and Chicago police officers killed several protesters To protest the killing, protesters planned a rally for May 4 To protest the killing, protesters planned a rally for May 4 3,000 gather at Chicagos Haymarket Square 3,000 gather at Chicagos Haymarket Square During the protest, a bomb exploded During the protest, a bomb exploded 7 police officers were killed and civilians killed and injured 7 police officers were killed and civilians killed and injured Chicago police hunt down murderers Chicago police hunt down murderers 8 anarchists were convicted of conspiracy to murder 8 anarchists were convicted of conspiracy to murder

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4 were hung and 1 committed suicide This caused the public to look down on labor unions especially the Knights of Labor Gov. Altgeld of Illinois later issued pardons for the remaining accused anarchists.

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The five men are clockwise from 1:00 o'clock: A. R. Parsons Adolph Fischer George Engel August Spies Louis Lingg (middle) The first four were hanged on Friday, November 11, 1887. Lingg committed suicide on November 10, 1887 by lighting a stick of dynamite in his mouth.

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Picture: Workers vs Owner Americans were suspicious of labor unions because they tended to go against laissez faire and capitalism. Labor strikes were often violent.Americans were suspicious of labor unions because they tended to go against laissez faire and capitalism. Labor strikes were often violent. Haymarket Riot

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Strikers ambush them and forced Pinkertons to walk the gauntlet between striking families. Some killed and many injured National Guard was called in by the governor of Pennsylvania to stop violence and reopen plant

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Carnegie successfully broke up the attempt to organize a union. No labor unions in steel industry until the 1920s.No labor unions in steel industry until the 1920s. Carnegie would be remembered for events at Homestead. His public image sufferedHis public image suffered

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24.Strikes Rock the Nation Pullman, 1894 –Eugene Debs instructed all RR workers to not operate Pullman co. cars –Railway owners turned to the government for help. The judge cited the Sherman Antitrust Act and won a court order forbidding all union activity that halted railroad traffic. –Court orders against unions continued, limiting union gains for the next 30 years.